I went to 2 different dealers yesterday with a check in hand hoping to order a new '14 Summit at 3% Below Invoice and struck out twice !!

Background: I was looking to order a '14 Summit, V8, Auburn Pearl with Brown<O</OTrade: I was trading in my 2007 Acura MDX with 122,000 miles and both dealers used "Galves" for the trade value. I paid the $4.95 to get Galves Values and they came up with the exact same price I had (12,575). Both dealers said the high mileage made it destined for wholesale auction so they didn't have alot of room with it. (not sure if this is true ?)<O</ODealer #1: Test drove here 2 weeks ago, then found out a good friend of mine is a friend, business associate and golf partner of the Dealer's Owner so he referred me and I had corresponded with the owner ahead of time by e-mail so he was expecting me. Let me take a Overland V8 and a Summit V6 each on a 20 mile, 45 minute test drive (including parked time comparing stereos with SD card) in city and highway at 80mph without the salesmen & confirmed I wanted the Summit's stereo and a V8. <O</ODealt with the Owner directly and was offered 1% below invoice (as per the prices on page 1 of Milous' pricing thread) and he called this "Special Affiliate Pricing". I countered with 3% and they would NOT BUDGE at all. They finally increased the trade by 600 but that was the best they could do and let me walk out.<O</ODealer #2: Had already test drove here 2 weeks ago, so sat down with salesmen to talk #'s. He offered the same for trade and printed sheet showing MSRP and Invoice (again matched Milous' numbers) and offered me Dealer Invoice. I said the "tread lightly" program will get me 1% so you had to do better than that and he went down to 1.5% below invoice. When I countered with 3% below, he circled the HB number of $1,650 at the bottom and said this Holdback amount is 3% and was their cost and would make NO money at that price and thus was willing to split the Holdback at 1.5%<O</OHe also said my Trade would be "re-valued" at Delivery and I would have to accept the new value - but I countered and said whatever #'s we agree on today is our contract. I won't ask for more off the Jeep price when it comes in, so you can't ask for a lesser trade value !! I think he would go for this, but didn't move from the 1.5% and I again walked out !!<O</O* Both Dealers acknowledged I did my Homework (Thanks to you guys !!).......So what did I do wrong ?<O</O* Can somebody please explain the "Dealer Holdback" and how this works ? Does the 3% Holdback rate sound right and can the Dealer go below this amount ?<O</O* I had read about deals in the 3%, 4%, 5% and 6% below invoice (granted some were group buys) but I thought the 3% number seemed fair to both sides.<O</O* What should my next step be ?

I went to 2 different dealers yesterday with a check in hand hoping to order a new '14 summit at 3% below invoice and struck out twice !!

background: i was looking to order a '14 summit, v8, auburn pearl with brown
<otrade: i was trading in my 2007 acura mdx with 122,000 miles and both dealers used "galves" for the trade value. I paid the $4.95 to get galves values and they came up with the exact same price i had (12,575). Both dealers said the high mileage made it destined for wholesale auction so they didn't have alot of room with it. (not sure if this is true ?)
<odealer #1: test drove here 2 weeks ago, then found out a good friend of mine is a friend, business associate and golf partner of the dealer's owner so he referred me and i had corresponded with the owner ahead of time by e-mail so he was expecting me. Let me take a overland v8 and a summit v6 each on a 20 mile, 45 minute test drive (including parked time comparing stereos with sd card) in city and highway at 80mph without the salesmen & confirmed i wanted the summit's stereo and a v8.
<o
dealt with the owner directly and was offered 1% below invoice (as per the prices on page 1 of milous' pricing thread) and he called this "special affiliate pricing". I countered with 3% and they would not budge at all. They finally increased the trade by 600 but that was the best they could do and let me walk out.
<odealer #2: had already test drove here 2 weeks ago, so sat down with salesmen to talk #'s. He offered the same for trade and printed sheet showing msrp and invoice (again matched milous' numbers) and offered me dealer invoice. I said the "tread lightly" program will get me 1% so you had to do better than that and he went down to 1.5% below invoice. When i countered with 3% below, he circled the hb number of $1,650 at the bottom and said this holdback amount is 3% and was their cost and would make no money at that price and thus was willing to split the holdback at 1.5%
<o
he also said my trade would be "re-valued" at delivery and i would have to accept the new value - but i countered and said whatever #'s we agree on today is our contract. I won't ask for more off the jeep price when it comes in, so you can't ask for a lesser trade value !! I think he would go for this, but didn't move from the 1.5% and i again walked out !!
<o
* both dealers acknowledged i did my homework (thanks to you guys !!).......so what did i do wrong ?
<o
* can somebody please explain the "dealer holdback" and how this works ? Does the 3% holdback rate sound right and can the dealer go below this amount ?
<o
* i had read about deals in the 3%, 4%, 5% and 6% below invoice (granted some were group buys) but i thought the 3% number seemed fair to both sides.
<o
* what should my next step be ?

Some people have been able to get 2% or more by themselves. If your willing to drive a little try contacting more dealers in your state to see if they will work with you. If you are using affiliate program, the dealer is getting that money back so they aren't losing anything.

You went in with high expectations. While there are some dealers who will go very low to beat quotas and maybe build allocations for the following year, that's not a typical way to do business.

As for the trade in, the dealer was right. Mine put a mileage limit to maintain the price. It was fair, and I didn't come close. And, if Jeep came out with a rebate by the time your Jeep came in, you would be asking for it ... and get it.

Once the dealer goes below 2% of invoice (with affiliate) his profit is the 3% hold back, less any expenses. Expenses on an ordered car should be minimal. On top of that he may get bonuses for reaching 2 quotas.

If they let you walk out, the deal wasn't worth doing for them. Its just business.

It is hard for a Jeep dealer to sell a 120k mile Acura on their lot. They will send it to auction, and thus won't give you more than a couple grand less than average auction prices. Regardless of what a book says about value.

If we're talking about 1.5% of invoice, we're talking about $750 maximum. Its up to you to decide if $750 is worth not having the Jeep you want. The numbers are what the numbers are...

Agreed here, you're expecting too much out of them. It's a brand new vehicle and you're asking them to take your high mileage trade that they're not going to make any money on, take a check from you so they're not going to make any money on financing, and give you the vehicle at their cost.

Reading the forums I can understand why you'd expect that they'd take this deal. A lot of people will "spin" their stories so they can feel like they got a better deal ("Oh I got mine brand new at 15% under invoice and the dealer gave me a handy out back!"). Reality is, the dealer has to make their money too.

1.5% under invoice is a smoking deal. And the re-value thing makes sense, it's a few weeks away, and you could crash it, drive it across country, etc.

It sounds to me like both dealers are willing to give you a damn good deal, you're just expecting them to lose money to sell to you.